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Sincerely, |
TERRY J. LUNDGREN |
Chairman of the Board and Chief Executive Officer |
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE CAST YOUR VOTE PROMPTLY. |
May 15, 2015 | Macy's, Inc. Corporate Office |
11:00 a.m. (Eastern Time) | 7 West Seventh Street |
Cincinnati, Ohio 45202 |
1. | Elect 13 members of Macy's board of directors; |
2. | Ratify the appointment of KPMG LLP as Macy's independent registered public accounting firm for the fiscal year ending January 30, 2016; |
3. | Cast an advisory vote to approve the compensation of our named executive officers; and |
4. | Conduct any other business as may properly come before the meeting or any postponement or adjournment of the meeting. |
By Order of the Board of Directors, |
DENNIS J. BRODERICK Secretary |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREOWNERS TO BE HELD ON MAY 15, 2015. |
The Notice of Annual Meeting, Proxy Statement and Annual Report on Form 10-K for the year ended January 31, 2015 are available at www.proxyvote.com and www.macysinc.com. |
PROXY STATEMENT SUMMARY | 2 | |
GENERAL | 9 | |
STOCK OWNERSHIP | 12 | |
ITEM 1. ELECTION OF DIRECTORS | 14 | |
FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS | 21 | |
ITEM 2. APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 35 | |
ITEM 3. ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION | 36 | |
COMPENSATION DISCUSSION & ANALYSIS | 37 | |
COMPENSATION COMMITTEE REPORT | 57 | |
COMPENSATION OF THE NAMED EXECUTIVES FOR 2014 | 57 | |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | 72 | |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION | 72 | |
POLICY ON RELATED PERSON TRANSACTIONS | 73 | |
REPORT OF THE AUDIT COMMITTEE | 73 | |
SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS | 74 | |
OTHER MATTERS | 74 | |
APPENDIX A. POLICY AND PROCEDURES FOR PRE-APPROVAL OF NON-AUDIT SERVICES BY OUTSIDE AUDITORS | A-1 |
Time and date: | 11:00 a.m., Eastern Time, on May 15, 2015 |
Place: | Macy's, Inc., 7 West Seventh Street, Cincinnati, OH 45202 |
Record date: | March 20, 2015 |
How to vote: | In general, you may vote either in person at the annual meeting or by telephone, the Internet, or mail. |
Common shares outstanding as of record date: | 341,599,642 shares |
Proposal | Board Voting Recommendation | Page | ||
Item 1. | Election of 13 directors | FOR EACH NOMINEE | 14 | |
Item 2. | Ratification of KPMG LLP as our independent registered public accounting firm for fiscal 2015 | FOR | 35 | |
Item 3. | Advisory vote to approve our named executive officer compensation | FOR | 36 | |
Page | Page | ||||||
ü | Confidential Voting Policy | 9 | ü | Annual Board and Committee Evaluations | 26 | ||
ü | Single Voting Class | 9 | ü | Diverse Board in Terms of Gender, Ethnicity, Experience and Skills | 3 | ||
ü | Annual Election of All Directors | 14 | ü | Director Retirement Policy | 31 | ||
ü | Majority Voting in Uncontested Director Elections | 9 | ü | Director Resignation Policy | 31 | ||
ü | 12 of 13 Director Nominees are Independent | 21 | ü | Board and Committee Oversight of Risk | 23 | ||
ü | Independent Presiding Director | 23 | ü | No Shareholder Rights Plan | n/a | ||
ü | Independent Board Committees | 24 | ü | Share Ownership Guidelines for Directors and Executive Officers | 34; 55 | ||
ü | Regular Executive Sessions of Independent Directors | 22 | ü | Policy Prohibiting Pledging and Hedging Ownership of Macy's Stock | 56 | ||
Name | Age | Director Since | Independent | Principal Occupation | |||||||||
Committee Memberships | Other Public Directorships | ||||||||||||
Stephen F. Bollenbach | 72 | 2007 | ü | Non-Executive Chairman of the Board of Directors of KB Home | • Audit • Finance | • KB Home • Moelis & Company • Mondelez International • Time Warner, Inc. | |||||||
John A. Bryant | 49 | 2015 | ü | Chairman, President and CEO of Kellogg Company | • Audit | • Kellogg Company | |||||||
Deirdre P. Connelly | 54 | 2008 | ü | Former President, North American Pharmaceuticals of GlaxoSmithKline | • Compensation and Management Development • Nominating and Corporate Governance | ||||||||
Meyer Feldberg | 73 | 1992 | ü | Dean Emeritus and Professor of Leadership and Ethics at Columbia Business School | • Compensation and Management Development (Chair) • Nomination and Corporate Governance | • Revlon, Inc. • UBS Global Asset Management | |||||||
Leslie D. Hale | 42 | 2015 | ü | Executive Vice President, CFO and Treasurer of RLJ Lodging Trust | • Finance | ||||||||
Sara Levinson | 64 | 1997 | ü | Co-Founder and Director of Kandu | • Compensation and Management Development • Nominating and Corporate Governance | • Harley Davidson, Inc. | |||||||
Terry J. Lundgren | 62 | 1997 | Chairman and CEO of Macy's, Inc. | • Kraft Foods Group, Inc. • The Procter & Gamble Company • Federal Reserve Bank of New York | |||||||||
Joseph Neubauer | 73 | 1992 | ü | Former Chairman of ARAMARK | • Audit (Chair) • Compensation and Management Development • Finance | • Mondelez International | |||||||
Joyce M. Roché | 68 | 2006 | ü | Former President and CEO of Girls Incorporated | • Audit • Nominating and Corporate Governance (Chair) | • AT&T, Inc. • Dr. Pepper Snapple Group • Tupperware Corporation | |||||||
Paul C. Varga | 51 | 2012 | ü | Chairman and CEO of Brown-Forman Corporation | • Compensation and Management Development • Nominating And Corporate Governance | • Brown-Forman Corporation | |||||||
Craig E. Weatherup | 69 | 1996 | ü | Former CEO of The Pepsi-Cola Company | • Compensation and Management Development • Nominating and Corporate Governance | • Starbucks Corporation | |||||||
Marna C. Whittington | 67 | 1993 | ü | Former CEO of Allianz Global Investors Capital | • Audit • Finance (Chair) | • Oaktree Capital Group, LLC • Phillips 66 | |||||||
Annie Young-Scrivner | 46 | 2014 | ü | Executive Vice President, Starbucks Corporation; President, Teavana | • Nominating and Corporate Governance |
TENURE (# years) | GENDER | AGES (# years) | |||||||||
<5 | 5 to <10 | 10 to <20 | ≥20 | Female | Male | <50 | 50 to <60 | 60 to <70 | ≥70 | ||
Bryant | Bollenbach | Levinson | Feldberg | 6 | 7 | Bryant | Connelly | Levinson | Bollenbach | ||
Hale | Connelly | Lundgren | Neubauer | Hale | Varga | Lundgren | Feldberg | ||||
Varga | Roché | Weatherup | Whittington | Young-Scrivner | Roché | Neubauer | |||||
Young-Scrivner | Weatherup | ||||||||||
Whittington | |||||||||||
ETHNICITY | |||||||||||
African-American: | 2 | ||||||||||
Asian-American: | 1 | ||||||||||
Hispanic: | 1 |
Year | Audit Fees ($) | Audit-Related Fees ($) | Tax Fees ($) | All Other Fees ($) | Total ($) | ||||||||||
2014 | 4,700,000 | 1,229,300 | 7,735 | 334,496 | 6,271,531 | ||||||||||
2013 | 5,345,000 | 1,209,300 | 75,000 | 90,950 | 6,720,250 |
• | Comparable sales on an owned basis in fiscal 2014 were up 0.7%, our fifth consecutive year of comparable sales growth. |
• | Comparable sales on an owned plus licensed basis for fiscal 2014 were up 1.4% compared to fiscal 2013. |
2010 | 2011 | 2012 | 2013 | 2014 | ||||||
Comparable Sales Growth: | ||||||||||
On an owned basis | 4.6% | 5.3% | 3.7% | 1.9% | 0.7% | |||||
On an owned plus licensed basis | 4.4% | 5.7% | 4.0% | 2.8% | 1.4% |
Other Fiscal 2014 Highlights | |
| Our 1-Year, 3-Year and 5-Year Cumulative TSR was 22.4%, 100.5% and 334.3%, respectively. |
| Our TSR over the last 5 years is above the 84th percentile compared to our peer group over the same 5-year period. |
| The price of our Common Stock increased by 20% over the fiscal 2013 year-end price. |
| We returned $2.3 billion to shareholders through dividends and share repurchases during fiscal 2014. |
| We increased our cash dividend by 25% in fiscal 2014. |
CEO Targeted Pay Mix | Salary | Annual Incentive | Performance Restricted Stock Units | Stock Options | Total |
% of Total Compensation | 13% | 22% | 39% | 26% | 100% |
Cash vs. Equity | 35% | 65% | 100% | ||
Short-Term vs. Long-Term | 35% | 65% | 100% | ||
Fixed vs. Performance-Based | 13% | 87% | 100% |
Other Named Executives Targeted Pay Mix (average) | Salary | Annual Incentive | Performance Restricted Stock Units | Stock Options | Total |
% of Total Compensation | 29% | 24% | 28% | 19% | 100% |
Cash vs. Equity | 53% | 47% | 100% | ||
Short-Term vs. Long-Term | 53% | 47% | 100% | ||
Fixed vs. Performance-Based | 29% | 71% | 100% |
• | Vesting of PRSUs. With respect to performance-based restricted stock units (PRSUs) granted in fiscal 2012, our strong financial performance over the three-year (fiscal 2012-2014) performance period with respect to cumulative Adjusted EBITDA, average Adjusted EBITDA margin, average ROIC and relative total shareholder return (TSR) performance metrics resulted in 98.59% of the targeted number of PRSUs being earned (see page 53). |
• | Fiscal 2014 annual incentive award. The annual incentive award payouts for fiscal 2014 performance were subject to achievement of pre-determined targeted levels of financial results with respect to three key performance metrics included in our annual business plan (sales, Adjusted EBIT and cash flow). The CMD Committee determined that the Company achieved performance between the threshold and target levels. This resulted in award payments to the named executive officers of approximately 94% of their targeted annual incentive opportunity (see page 51). |
• | PRSU grants. The CMD Committee granted PRSUs to the named executive officers with a three-year (fiscal 2014-2016) performance period. These stock units have cumulative Adjusted EBITDA, average Adjusted EBITDA margin, average ROIC and relative TSR performance metrics (see page 52). |
Named Executive Officer | Salary ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Changes in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||||||
Terry J. Lundgren | 1,600,000 | 5,008,425 | 3,285,990 | 2,556,200 | 3,813,691 | 232,914 | 16,497,220 | ||||||||||||||
Karen M. Hoguet | 895,833 | 807,766 | 529,993 | 634,900 | 697,866 | 46,923 | 3,613,281 | ||||||||||||||
Jeffrey Gennette | 937,500 | 1,097,357 | 719,988 | 892,900 | 634,832 | 48,235 | 4,330,812 | ||||||||||||||
Timothy M. Adams | 857,500 | 807,766 | 529,993 | 606,600 | 449,379 | 45,071 | 3,296,309 | ||||||||||||||
Peter R. Sachse | 895,833 | 807,766 | 529,993 | 634,900 | 649,490 | 46,923 | 3,564,905 |
WHAT WE DO AND DON'T DO | |||
We align executive compensation with the interests of our shareholders | ü | Focus on performance-based compensation (page 47) | |
ü | Pay well-aligned with performance (pages 38-41) | ||
ü | Annual risk assessment of executive compensation program (page 23) | ||
ü | Robust stock ownership guidelines for executive officers and directors (pages 34 and 55) | ||
Our executive compensation program is designed to avoid excessive risk taking | ü | Use multiple performance objectives for both annual and long-term incentive plans (pages 50 and 52) | |
ü | Measure performance against both annual and multi-year standards (pages 49 and 51) | ||
ü | Set performance goals at levels high enough to encourage strong performance, but within reasonably attainable parameters to discourage excessive risk taking (pages 49 and 52) | ||
ü | Cap on performance-based compensation (pages 49 and 52) | ||
We adhere to executive compensation best practices | ü | Provide modest perquisites with reasonable business rationale (pages 53-54) | |
ü | Annual say-on-pay vote (page 36) | ||
ü | CMD Committee comprised of independent directors (page 25) | ||
ü | Include a relative-to-peer TSR metric for performance-based restricted stock units (page 53) | ||
ü | Provide for recoupment of incentive compensation in certain circumstances (page 55) | ||
ü | Prohibit hedging and pledging transactions by executive officers and directors (page 56) | ||
ü | Utilize an independent compensation consultant that is independent of management (page 43) | ||
ü | Provide a reasonable post-employment change-in-control plan (page 54) | ||
X | Provide excise tax gross ups upon a change in control | ||
X | Individual employment contracts (page 67) | ||
X | Reprice or exchange underwater stock options (page 60) | ||
X | Individual change-in-control agreements (page 68) |
• | if required by applicable law; |
• | to persons engaged in the receipt, counting, tabulation or solicitation of proxies who have agreed to maintain shareholder confidentiality as provided in the policy; |
• | in those instances in which shareholders write comments on their proxy cards or otherwise consent to the disclosure of their vote to Macy's management; |
• | in the event of a proxy contest or a solicitation of proxies in opposition to the voting recommendations of the Board of Directors; |
• | in respect of a shareholder proposal that the Nominating and Corporate Governance Committee of the Board, referred to as the NCG Committee, after having allowed the proponent of the proposal an opportunity to present its views, determines is not in the best interests of Macy's and its shareholders; and |
• | in the event that representatives of Macy's determine in good faith that a bona fide dispute exists as to the authenticity or tabulation of voting materials. |
• | Item 1. Director nominees must be elected by the affirmative vote of a majority of the shares represented at the meeting and actually voted on the matter. Abstentions and broker non-votes will have no effect in determining whether the proposal has been approved. |
• | Item 2. Ratification of the appointment of KPMG LLP as our independent registered public accounting firm requires the affirmative vote of a majority of the shares represented at the meeting and actually voted on the matter. Abstentions and broker non-votes will have no effect in determining whether the proposal has been approved. |
• | Item 3. The advisory (non-binding) proposal to approve the compensation of our named executive officers, as disclosed in this proxy statement, requires the affirmative vote of a majority of the shares represented at the meeting and actually voted on the matter. Abstentions and broker non-votes will have no effect in determining whether the proposal has been approved. |
• | FOR each of the director nominees (Item 1); |
• | FOR the ratification of the appointment of our independent registered public accounting firm (Item 2); and |
• | FOR the advisory vote to approve the compensation of our named executive officers (Item 3). |
• | Internet: You can vote over the Internet at the Web address shown on your Notice Regarding the Availability of Proxy Materials or your proxy card if you received a proxy card up until 11:59 p.m., Eastern Time, on May 14, 2015. Internet voting is available 24 hours a day, seven days a week. When you vote over the Internet, you should not return your proxy card. |
• | Telephone: You can vote by telephone by calling the toll-free number provided on the Web address referred to above or on your proxy card up until 11:59 p.m., Eastern Time, on May 14, 2015. Telephone voting is available 24 hours a day, seven days a week. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. When you vote by telephone, you should not return your proxy card. |
• | Mail: If you received a proxy card, you can vote by mail by simply signing, dating and mailing your proxy card in the postage-paid envelope included with this proxy statement. Your proxy card must be received prior to 11:59 p.m., Eastern Time, on May 14, 2015. |
• | submitting evidence of your revocation to the Company's Corporate Secretary; |
• | voting again over the Internet or by telephone prior to 11:59 p.m., Eastern Time, on May 14, 2015; |
• | signing another proxy card bearing a later date and mailing it so that it is received prior to 11:59 p.m., Eastern Time, on May 14, 2015; or |
• | voting in person at the annual meeting, although attendance at the annual meeting will not, in itself, revoke a proxy. |
• | following the instructions provided on your proxy card, voting instruction card or Notice Regarding the Availability of Proxy Materials; or |
• | going to www.proxyvote.com and following the instructions provided. |
Name and Address | Date of Most Recent Schedule 13G Filing | Number of Shares | Percent of Class | ||||
BlackRock, Inc. ("BlackRock") (1) 40 East 52nd Street New York, NY 10022 | January 12, 2015 | 21,110,627 | 6.1% | ||||
The Vanguard Group ("Vanguard") (2) 100 Vanguard Blvd. Malvern, PA 19355 | February 9, 2015 | 18,213,202 | 5.27% |
(1) | Based on a Schedule 13G/A dated January 12, 2015 and filed with the SEC by BlackRock on January 30, 2015. The Schedule 13G/A reports that, as of December 31, 2014, BlackRock had sole voting power over 18,031,436 shares and sole dispositive power over 21,110,627 shares of Macy's common stock. |
(2) | Based on a Schedule 13G/A dated February 9, 2015 and filed with the SEC by Vanguard on February 11, 2015. The Schedule 13G/A reports that, as of December 31, 2014, Vanguard had sole voting power over 609,932 shares, sole dispositive power over 17,635,939 shares and shared dispositive power over 577,263 shares of Macy's common stock. The Schedule 13G/A also reports that Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 475,987 of the shares as a result of its serving as investment manager of collective trust accounts and Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owners of 235,221 of the shares as a result of its serving as investment manager of Australian investment offerings. |
Name | Number of Shares | Percent of Class | |||||||
(1) | (2) | ||||||||
Stephen F. Bollenbach | 61,082 | 56,012 | less than 1% | ||||||
John A. Bryant | 0 | 0 | less than 1% | ||||||
Deirdre P. Connelly | 27,166 | 20,982 | less than 1% | ||||||
Meyer Feldberg | 47,619 | 43,756 | less than 1% | ||||||
Leslie D. Hale | 0 | 0 | less than 1% | ||||||
Sara Levinson | 28,347 | 28,347 | less than 1% | ||||||
Joseph Neubauer | 263,117 | 111,077 | less than 1% | ||||||
Joyce M. Roché | 70,211 | 68,219 | less than 1% | ||||||
Paul C. Varga | 1,158 | 308 | less than 1% | ||||||
Craig E. Weatherup | 100,722 | 94,722 | less than 1% | ||||||
Marna C. Whittington | 96,221 | 61,387 | less than 1% | ||||||
Annie Young-Scrivner | 51 | 51 | less than 1% | ||||||
Terry J. Lundgren | 3,082,279 | 2,666,551 | less than 1% | ||||||
Karen M. Hoguet | 587,986 | 396,655 | less than 1% | ||||||
Jeffrey Gennette | 139,223 | 102,110 | less than 1% | ||||||
Timothy M. Adams | 196,259 | 162,866 | less than 1% | ||||||
Peter R. Sachse | 253,126 | 135,726 | less than 1% | ||||||
All directors and executive officers as a group (25) persons) (3) | 5,429,853 | 4,341,063 | 1.47% |
(1) | Aggregate number of shares of Macy's common stock currently held or which may be acquired within 60 days after March 20, 2015 (i) through the exercise of options granted under our Amended and Restated 2009 Omnibus Incentive Compensation Plan, referred to as the 2009 Omnibus Plan, our 1995 Executive Equity Incentive Plan, referred to as the 1995 Equity Plan, or our 1994 Stock Incentive Plan, referred to as the 1994 Stock Plan and (ii) with respect to the Non-Employee Directors, also through distributions in settlement of deferred stock credits that would be triggered if the director's service on the Board were to end during the 60-day period. |
(2) | Number of shares of Macy's common stock which may be acquired within 60 days after March 20, 2015 (i) through the exercise of options granted under the 2009 Omnibus Plan, the 1995 Equity Plan and the 1994 Stock Plan and (ii) with respect to Non-Employee Directors, also through distributions in settlement of deferred stock credits that would be triggered if the director's service on the Board were to end during the 60-day period. |
(3) | The "all directors and executive officers group" does not include Timothy M. Adams, who ceased being an executive officer as of the end of fiscal 2014. |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights ($) (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | |||||||
(thousands) | (thousands) | |||||||||
Equity compensation plans approved by security holders | 19,679 | 36.65 | 24,000 | |||||||
Equity compensation plans not approved by security holders | 0 | 0 | 0 | |||||||
Total | 19,679 | 36.65 | 24,000 |
STEPHEN F. BOLLENBACH | Current and Past Positions: | |
Non-Executive Chairman of the Board of KB Home | Non-Executive Chairman of the Board of Directors of KB Home, a homebuilding company, since April 2007. | |
Age: 72 | Co-Chairman and Chief Executive Officer of Hilton Hotels Corporation from May 2004 until his retirement in October 2007. | |
Director since: June 2007 | Chief Executive Officer and President of Hilton Hotels Corporation from February 1996 to May 2004. | |
Committees: Audit; Finance | Prior to his affiliation with Hilton Hotels, he held Chief Financial Officer positions at The Walt Disney Corporation, Marriott Corporation and The Trump Organization. | |
Other Current Directorships: | ||
KB Home | ||
Moelis & Company | ||
Mondelez International, Inc. | ||
Time Warner, Inc. | ||
Key Qualifications, Experience and Attributes: | ||
Mr. Bollenbach has many years of leadership experience and expertise as a former Chief Executive Officer or senior executive of several major consumer-oriented companies in the family entertainment, media and hospitality industries. He also has extensive knowledge and experience in finance and investments as a former Chief Financial Officer of several companies. In addition, Mr. Bollenbach has several years of valuable experience as a public company board member and expertise in finance, risk, accounting, strategy and governance through his service on board committees. |
JOHN A. BRYANT | Current and Past Positions: | |
Chairman, President and Chief Executive Officer of Kellogg Company | Chairman of the Board of Kellogg Company since July 2014 and President and Chief Executive Officer since January 2011. | |
Age: 49 | Executive Vice President and Chief Operating Officer of Kellogg Company from January 2010 to January 2011. | |
Director Since: March 2015 | Executive Vice President, Chief Operating Officer and Chief Financial Officer of Kellogg Company from August 2008 through December 2009. | |
Committees: Audit | Executive Vice President and Chief Financial Officer of Kellogg Company and President, Kellogg North America from July 2007 to August 2008. | |
Executive Vice President and Chief Financial Officer of Kellogg Company and President, Kellogg International from December 2006 to July 2007. | ||
Mr. Bryant joined Kellogg Company in 1998 and was promoted during the next eight years to a number of key financial and executive leadership roles. | ||
Other Current Directorships: | ||
Kellogg Company | ||
Key Qualifications, Experience and Attributes: | ||
Mr. Bryant has many years of leadership experience and expertise as a Chief Executive Officer, Chief Financial Officer and senior executive of a large public company with global operations. He has extensive knowledge and expertise in accounting and financial matters, branded consumer products and consumer dynamics, crises management, international markets, people management, the retail environment and strategy and strategic planning. In addition, Mr. Bryant has several years of valuable experience as a public company board member. |
DEIRDRE P. CONNELLY | Current and Past Positions: | |
Former President, North American Pharmaceuticals of GlaxoSmithKline | President, North American Pharmaceuticals of GlaxoSmithKline, a global pharmaceutical company, from February 2009 until her retirement in February 2015. | |
Age: 54 | President - U.S. Operations of Eli Lilly and Company from June 2005 to January 2009. | |
Director since: January 2008 | Senior Vice President - Human Resources of Eli Lilly and Company from October 2004 to June 2005. | |
Committees: CMD; NCG | Vice President - Human Resources of Eli Lilly and Company from May 2004 to October 2004. | |
Executive Director, Human Resources - U.S. Operations of Eli Lilly and Company from 2003 to May 2004. | ||
Leader, Women's Health Business - U.S. Operations of Eli Lilly and Company from 2001 to 2003. | ||
Key Qualifications, Experience and Attributes: | ||
Ms. Connelly has many years of leadership experience and expertise as a senior executive of large publicly-traded companies with global operations. She has extensive knowledge and expertise in strategy, operations, product development, brand marketing and merchandising. In addition, as a former Human Resources executive, Ms. Connelly also has valuable insight in managing a large-scale, diverse workforce. |
MEYER FELDBERG | Current and Past Positions: | |
Dean Emeritus and Professor of Leadership and Ethics at Columbia Business School | Dean Emeritus and Professor of Leadership and Ethics at Columbia Business School at Columbia University, since June 2004. He is currently on leave of absence from Columbia University and is serving as a Senior Advisor at Morgan Stanley. | |
Age: 73 | Dean of the Columbia Business School at Columbia University from 1989 to June 2004. | |
Director since: May 1992 | New York Mayor Michael Bloomberg appointed Professor Feldberg in 2007 as the President of NYC Global Partners, an office in the Mayor's office that manages the relationships between New York City and other global cities around the world. | |
Committees: CMD (chair); NCG | Teaching and leadership positions in the business schools of the University of Cape Town, Northwestern and Tulane. | |
President of the Illinois Institute of Technology from 1986 to 1989. | ||
Other Current Directorships: | ||
Revlon, Inc. | ||
UBS Global Asset Management | ||
Other Previous Directorships During Last Five Years: | ||
Primedia, Inc. (until 2011) | ||
Sappi Limited (served as Lead Director) (until 2012) | ||
Key Qualifications, Experience and Attributes: | ||
Professor Feldberg has significant leadership and expertise in business and public policy, including as Dean of the Columbia Business School and President of NYC Global Partners. He has extensive knowledge and experience in accounting, finance and investments, having served as a counselor to leaders in business and finance around the world. Professor Feldberg has several years of valuable experience as a public company board member and has expertise in corporate governance, risk management, finance and executive compensation through his service on board committees. |
LESLIE D. HALE | Current and Past Positions: | |
Chief Financial Officer, Treasurer and Executive Vice President of RLJ Lodging Trust | Chief Financial Officer, Treasurer and Executive Vice President of RLJ Lodging Trust, a publicly-traded lodging real estate investment trust, since February 2013. | |
Age: 42 | Chief Financial Officer, Treasurer and Senior Vice President of RLJ Lodging Trust from May 2011 through January 2013. | |
Director since: January 2015 | Chief Financial Officer and Senior Vice President of Real Estate and Finance of RLJ Development from September 2007 until the formation of RLJ Lodging Trust in 2011. | |
Committees: Finance | Vice President of Real Estate and Finance for RLJ Development from 2006 to September 2007. | |
Director of Real Estate and Finance of RLJ Development from 2005 to 2006. | ||
From 2002 to 2005, Mrs. Hale held several positions within the global financial services divisions of General Electric Corp., including as a vice president in the business development group of GE Commercial Finance, and as an associate director in the GE Real Estate strategic capital group. Prior to that, she was an investment banker at Goldman, Sachs & Co. | ||
Key Qualifications, Experience and Attributes: | ||
Mrs. Hale has many years of leadership experience and expertise as a senior executive of large public companies. She has extensive knowledge and experience in a wide range of financial disciplines, including corporate finance, treasury, real estate and business development. In addition, through her positions with RLJ Lodging Trust, General Electric and Goldman Sachs, Mrs. Hale also has expertise in investor relations, risk management, long-term strategic planning and mergers and acquisitions. |
SARA LEVINSON | Current and Past Positions: | |
Co-Founder and a director of Kandu | Co-Founder and a director of Kandu, a start-up company at the intersection of kids and technology, since April 2013. | |
Age: 64 | Non-Executive Chairman of ClubMom, Inc., an online social networking community for mothers, from October 2002 until February 2008. | |
Director since: May 1997 | Chairman and Chief Executive Officer of ClubMom from May 2000 through September 2002. | |
Committees: CMD; NCG | President of the Women's Group of publisher Rodale, Inc. from October 2002 until June 2005. | |
President of NFL Properties, Inc. from September 1994 through April 2000, where she oversaw a $2 billion consumer products and e-commerce division, corporate sponsorship, marketing, special events, club services and publishing. | ||
Other Current Directorships: | ||
Harley Davidson, Inc. | ||
Key Qualifications, Experience and Attributes: | ||
Ms. Levinson has many years of leadership experience and expertise as a former senior executive of several major consumer-oriented companies in the publishing, entertainment, and sports licensing industries. She has extensive knowledge and expertise in marketing, merchandising and trademark licensing. In addition, she has expertise in social networking, e-commerce and technology innovation. Ms. Levinson has several years of valuable experience as a public company board member and expertise in strategy, governance and executive compensation through her service on board committees. |
TERRY J. LUNDGREN | Current and Past Positions: | |
Chairman and Chief Executive Officer of Macy's, Inc. | Chairman of Macy's, Inc. since January 15, 2004 and Chief Executive Officer of Macy's, Inc. since February 26, 2003. | |
Age: 62 | President of Macy's, Inc. from February 26, 2003 through March 31, 2014. | |
Director since: May 1997 | President/Chief Operating Officer and Chief Merchandising Officer of Macy's, Inc. from April 15, 2002 until February 26, 2003. | |
President and Chief Merchandising Officer of Macy's, Inc. from May 16, 1997 until April 15, 2002. | ||
Other Current Directorships: | ||
Kraft Foods Group, Inc. | ||
The Procter & Gamble Company | ||
Federal Reserve Bank of New York | ||
Key Qualifications, Experience and Attributes: | ||
Mr. Lundgren has extensive leadership experience and consumer products and retail industry knowledge as the Company's Chief Executive Officer. With more than thirty years with the Company, he has significant knowledge of the Company's strategy and operations and expertise in brand marketing, merchandising, e-commerce, including digital marketing, and risk management. In addition, Mr. Lundgren has several years of valuable experience as a public company board member and expertise in governance and executive compensation through his service on board committees. |
JOSEPH NEUBAUER | Current and Past Positions: | |
Former Chairman of the Board of ARAMARK | Chairman of the Board of ARAMARK, a leading provider of a broad range of professional services, including food, hospitality, facility and uniform services, from April 1984 through February 3, 2015. | |
Age: 73 | Chief Executive Officer of ARAMARK from February 1983 to December 2003 and from September 2004 to May 2012. | |
Director since: September 1992 | Executive Chairman of ARAMARK from January 2004 to September 2004. | |
Committees: Audit (chair); CMD; Finance | President of ARAMARK from 1981 to January 1983. | |
Executive Vice President of Finance and Development and Chief Financial Officer of ARAMARK from 1979 to 1981. | ||
Other Current Directorships: | ||
Mondelez International, Inc. | ||
Other Previous Directorships During Last Five Years: | ||
ARAMARK (through February 3, 2015) | ||
Verizon Communications, Inc. (through May 1, 2014) | ||
Key Qualifications, Experience and Attributes: | ||
Mr. Neubauer has many years of leadership experience and expertise as the former Chief Executive Officer of ARAMARK, a large complex organization with international operations and a diverse workforce.Through his years with ARAMARK he obtained extensive knowledge and experience in corporate finance, risk, strategy, development and consumer services. In addition, Mr. Neubauer has several years of valuable experience as a public company board member and expertise in finance, risk, accounting, executive compensation and governance through his service on board committees. |
JOYCE M. ROCHÉ | Current and Past Positions: | |
Former President and Chief Executive Officer of Girls Incorporated | President and Chief Executive Officer of Girls Incorporated, a national non-profit research, education and advocacy organization, from September 2000 through May 2010. | |
Age: 68 | Independent marketing consultant from 1998 to August 2000. | |
Director since: February 2006 | President and Chief Operating Officer of Carson, Inc. from 1996 to 1998. | |
Committees: Audit; NCG (chair) | Ms. Roché also held senior marketing positions with Carson, Inc., Revlon, Inc. and Avon, Inc. | |
Other Current Directorships: | ||
AT&T, Inc. | ||
Dr. Pepper Snapple Group | ||
Tupperware Corporation | ||
Key Qualifications, Experience and Attributes: | ||
Ms. Roché has extensive leadership experience and expertise as the former Chief Executive Officer of a national nonprofit organization and former senior executive of several consumer products companies. She has extensive knowledge and experience in general management and in the marketing and merchandising areas, as well as financial acumen developed from her executive officer positions. Ms. Roché has several years of valuable experience as a public company board member and expertise in risk, accounting, executive compensation and governance through her service on board committees. |
PAUL C. VARGA | Current and Past Positions: | |
Chairman and Chief Executive Officer of Brown-Forman Corporation | Chairman of Brown-Forman Corporation, a spirits and wine company, since August 2007 and Chief Executive Officer since 2005. | |
Age: 51 | President and Chief Executive Officer of Brown-Forman Beverages (a division of Brown-Forman Corporation) from 2003 to 2005. | |
Director since: March 2012 | Global Chief Marketing Officer for Brown-Forman Spirits from 2000 to 2003. | |
Committees: CMD; NCG | Other Current Directorships: | |
Brown-Forman Corporation | ||
Key Qualifications, Experience and Attributes: | ||
Mr. Varga has many years of leadership experience and expertise as the Chief Executive Officer of a global, publicly-traded consumer products company. He has extensive knowledge and experience in corporate finance, strategy, building brand awareness, product development, marketing, distribution and sales. In addition, Mr. Varga has several years of valuable experience as a public company board member. |
CRAIG E. WEATHERUP | Current and Past Positions: | |
Former Chief Executive Officer of The Pepsi-Cola Company | Worked with PepsiCo, Inc. for 24 years and served as Chief Executive Officer of its worldwide Pepsi-Cola business and President of PepsiCo. | |
Age: 69 | Led the initial public offering of The Pepsi Bottling Group, Inc., where he served as Chairman and Chief Executive Officer from March 1999 to January 2003. | |
Director since: August 1996 | Other Current Directorships: | |
Committees: CMD; NCG | Starbucks Corporation | |
Key Qualifications, Experience and Attributes: | ||
Mr. Weatherup has many years of leadership experience and expertise as a former Chief Executive Officer of a global consumer products company with a large and diverse workforce. He has extensive knowledge and experience in brand marketing, distribution, sales and merchandising. In addition, Mr. Weatherup has several years of valuable experience as a public company board member and expertise in finance, risk, executive compensation and governance through his service on board committees. |
MARNA C. WHITTINGTON | Current and Past Positions: | |
Former Chief Executive Officer of Allianz Global Investors Capital | Chief Executive Officer of Allianz Global Investors Capital, a successor firm of Nicholas Applegate Capital Management, from 2002 until her retirement in January 2012. Allianz Global Investors Capital is a diversified global investment firm. | |
Age: 67 | Chief Operating Officer of Allianz Global Investors, the parent company of Allianz Global Investors Capital, from 2001 to 2011. | |
Director since: September 1992 | Prior to joining Nicholas Applegate in 2001, Dr. Whittington was Managing Director and Chief Operating Officer of Morgan Stanley Investment Management. | |
Committees: Audit; Finance (chair) | Dr. Whittington started in the investment management industry in 1992, joining Philadelphia-based Miller Anderson & Sherrerd. | |
Executive Vice President and CFO of the University of Pennsylvania, from 1984 to 1992. Earlier, she had been first, Budget Director, and later, Secretary of Finance, for the State of Delaware. | ||
Other Current Directorships: | ||
Oaktree Capital Group, LLC | ||
Phillips 66 | ||
Other Previous Directorships During Last Five Years: | ||
Rohm & Haas Company (until 2009) | ||
Key Qualifications, Experience and Attributes: | ||
Dr. Whittington has many years of leadership experience and expertise as a former Chief Executive Officer and senior executive in the investment management industry. She has extensive knowledge and experience in management, and in financial, investment and banking matters. In addition, Dr. Whittington has several years of valuable experience as a public company board member and expertise in finance, risk, accounting, strategy and governance through her service on board committees. |
ANNIE YOUNG-SCRIVNER | Current and Past Positions: | |
Executive Vice President of Starbucks Corporation; President of Teavana | Executive Vice President of Starbucks Corporation since September 2012 and President of its Teavana business since February 2014. | |
Age: 46 | President of Starbucks Canada from 2012 to 2014. | |
Director since: June 2014 | President of the Starbucks Tazo Tea business from 2011 to 2013. | |
Committees: NCG | Global Chief Marketing Officer for Starbucks Corporation from 2009 to 2012. | |
Chief Marketing Officer and Vice President of Sales for the Quaker Foods and Snacks division of PepsiCo, Inc. from 2008-2009. | ||
Ms. Young-Scrivner joined PepsiCo, Inc. in 1991 as a Route Sales Representative at its Frito-Lay division and held several sales, account management and marketing positions, including serving as Vice President of Sales for Greater China from 2005 to 2006 and Region President of PepsiCo Foods Greater China from 2006 to 2008 for the PepsiCo International operations of PepsiCo, Inc. | ||
Key Qualifications, Experience and Attributes: | ||
Ms. Young-Scrivner has many years of leadership experience and expertise as a senior executive of large consumer product companies with global operations. She has extensive knowledge and experience in international operations, sales, brand marketing, merchandising, human resource management and strategy. In addition, she has expertise in social networking, digital media, e-commerce and technology innovation. |
• | The director may not be (and may not have been within the preceding 36 months) an employee and no member of the director's immediate family may be (and may not have been within the preceding 36 months) an executive officer of Macy's or any of its subsidiaries. For purposes of these Standards for Director Independence, "immediate family" includes a person's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such person's home. |
• | Neither the director nor any member of his or her immediate family receives, or has received during any 12-month period within the preceding 36 months, direct compensation of more than $120,000 per year from Macy's or any of its subsidiaries (other than director and committee fees and pension or other forms of deferred compensation for prior service that is not contingent on continued service or, in the case of an immediate family member, compensation for service as a non-executive employee). |
• | (A)The director is not a current partner or employee of a firm that is Macy's internal or external auditor; (B) no member of the director's immediate family is a current partner of such a firm; (C) no member of the director's immediate family is an employee of such a firm and personally works on Macy's audit; or (D) neither the director nor any member of his or her immediate family was within the last three years a partner or employee of such a firm and personally worked on Macy's audit within that time. |
• | The director is not a current employee and no member of his or her immediate family is a current executive officer of a company that makes payments to, or receives payments from, Macy's for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues. |
• | The director does not serve as an executive officer of a charitable or non-profit organization to which Macy's has made contributions that, in any of the last three fiscal years, exceed the greater of $1 million or 2% of the charitable or non-profit organization's consolidated gross revenues. |
• | Neither the director nor a member of the director's immediate family is employed as an executive officer (and has not been so employed for the preceding 36 months) by another company where any of Macy's present executive officers at the same time serves or served on that company's compensation committee. |
• | presides over executive sessions of the Non-Employee Directors; |
• | works with management to set the agenda for each executive session, considering any matters proposed by other Non-Employee Directors to be discussed at an executive session; and |
• | meets separately with the Chairman and CEO within a reasonable period of time after an executive session to review the matters discussed during the executive session that require the Chairman and CEO's action or attention. |
• | Pay philosophy, peer group and market positioning are appropriate in light of our business model and size relative to our peer group of companies. |
• | The programs have an appropriate degree of balance with respect to the mix of cash and equity compensation and measure performance against both annual and multi-year standards. |
• | Performance goals are set at levels that are sufficiently high to encourage strong performances and support the resulting compensation expense, but within reasonably attainable parameters to discourage pursuit of excessively risky business strategies. |
• | The performance metrics focus participants on growth, profitability and asset efficiency, as well as absolute and relative stock price appreciation, thereby holding management accountable to achievement of key operational and strategic priorities that support our short- and long-term strategic objectives. |
• | The CMD Committee has the ability to reduce amounts earned under the annual incentive program to reflect a subjective evaluation of the quality of earnings, individual performance and other factors that should influence earned compensation. |
• | Meaningful risk mitigators are in place, including substantial stock ownership guidelines, the three-year relative TSR performance goal in the performance share program, compensation clawback provisions, anti-hedging/pledging policies, independent CMD Committee oversight, and engagement of an independent consultant that does no other work for the Company or management. |
AUDIT COMMITTEE | Number of Meetings in Fiscal 2014: 5 |
• | reviewing the professional services provided by our independent registered public accounting firm and the independence of such firm prior to initial engagement of the firm and annually thereafter; |
• | reviewing the scope of the audit by our independent registered public accounting firm; |
• | reviewing any proposed non-audit services by our independent registered public accounting firm to determine if the provision of such services is compatible with the maintenance of their independence, and approval of same; |
• | reviewing our annual financial statements, systems of internal accounting controls, material legal developments relating thereto, and legal compliance policies and procedures; |
• | discussing policies with respect to our risk assessment and risk management; |
• | reviewing matters with respect to our legal, accounting, auditing and financial reporting practices and procedures as it may find appropriate or as brought to its attention, including our compliance with applicable laws and regulations; |
• | monitoring the functions of our Compliance and Ethics organization, including review and discussing with management and the Board the organization's reports describing its on-going projects, the status of its communications and training programs, the status of pending compliance issues and other matters; |
• | reviewing with members of our internal audit staff the internal audit department's staffing, responsibilities and performance, including its audit plans, audit results and actions taken with respect to those results; and |
• | establishing procedures for the Audit Committee to receive, review and respond to complaints regarding accounting, internal accounting controls, and auditing matters, as well as confidential, anonymous submissions by employees of concerns related to questionable accounting or auditing matters. |
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE | Number of Meetings in Fiscal 2014: 6 |
• | reviewing the salaries of our chief executive officer and other executive officers and, either as a committee or together with the other independent directors (as directed by the Board), setting compensation levels for these executives; |
• | administering our incentive and stock option plans, including (i) establishing any annual or long-term performance goals and objectives and maximum annual or long-term incentive awards for the chief executive officer and the other executives, (ii) determining whether and the extent to which annual and/or long-term performance goals and objectives have been achieved, and (iii) determining related annual and/or long-term incentive awards for the chief executive officer and the other executives; |
• | reviewing and approving the benefits of the chief executive officer and our other executive officers; |
• | reviewing and approving any proposed employment agreement with, and any proposed severance, termination or retention plans, agreements or payments applicable to, any of our executive officers; |
• | advising and consulting with management regarding our pension, benefit and compensation plans, policies and practices; |
• | establishing chief executive officer and key executive succession plans, including plans in the event of an emergency, resignation or retirement; and |
• | reviewing and monitoring executive development strategies and practices for senior level positions and executives in order to assure the development of a pool of management and executive personnel for adequate and orderly management succession. |
FINANCE COMMITTEE | Number of Meetings in Fiscal 2014: 5 |
• | reviewing capital projects and other financial commitments and approving such projects and commitments above $25 million and below $50 million, reviewing and making recommendations to the Board with respect to approval of all such projects and commitments of $50 million and above, and reviewing and tracking the actual progress of approved capital projects against planned projections; |
• | reporting to the Board on potential transactions affecting our capital structure, such as financings, refinancings and the issuance, redemption or repurchase of our debt or equity securities; |
• | reporting to the Board on potential changes in our financial policy or structure which could have a material financial impact on the Company; |
• | reviewing the financial considerations relating to acquisitions of businesses and operations involving projected costs above $25 million and below $50 million and approving all such transactions, and recommending to the Board on all such transactions involving projected costs of $50 million and above; |
• | reviewing the financial considerations relating to dispositions of businesses and operations involving projected proceeds above $50 million, and endorsing and recommending to the Board all such transactions; and |
• | reviewing the management and performance of the assets of our retirement plans. |
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE | Number of Meetings in Fiscal 2014: 5 |
• | identifying and screening candidates for future Board membership; |
• | proposing candidates to the Board to fill vacancies as they occur, and proposing nominees to the Board for election by the shareholders at annual meetings; |
• | reviewing our Corporate Governance Principles and recommending to the Board any modifications that the NCG Committee deems appropriate; |
• | overseeing the annual evaluation of and reporting to the Board on the performance and effectiveness of the Board and its committees and other issues of corporate governance, and recommending to the Board any changes concerning the composition, size, structure and activities of the Board and the committees of the Board as the NCG Committee deems appropriate based on its evaluations; |
• | reviewing and reporting to the Board with respect to director compensation and benefits and make recommendations to the Board as the NCG Committee deems appropriate; and |
• | considering possible conflicts of interest of Board members and management and making recommendations to prevent, minimize, or eliminate such conflicts of interest. |
• | personal qualities and characteristics, accomplishments and reputation in the business community; |
• | knowledge of the retail industry or other industries relevant to our business; |
• | relevant experience and background that would benefit the Company; |
• | ability and willingness to commit adequate time to Board and committee matters; |
• | the fit of the individual's skills and personality with those of other directors and potential directors in building a Board that is effective, collegial and responsive to our needs; and |
• | diversity of viewpoints, background, experience and demographics. |
• | Leadership Experience: Directors with experience in significant senior leadership positions with large organizations over an extended period provide the Company with special insights. Strong leaders bring vision, strategic agility, diverse and global perspectives and broad business insight to the Company. These individuals demonstrate a practical understanding of how large organizations operate, including the importance of succession planning, talent management and how employee and executive compensation is set. They possess skills for managing change and growth and demonstrate a practical understanding of organizations, operations, processes, strategy, risk management and methods to drive growth. |
• | Finance Experience: An understanding of finance and related reporting processes is important for directors. We measure our operating and strategic performance by reference to financial goals, including for purposes of executive compensation. In addition, accurate financial reporting is critical to our success. Directors who are financially literate are better able to analyze our financial statements, capital structure and complex financial transactions and ensure the effective oversight of the Company's financial measures and internal control processes. |
• | Industry Knowledge and Global Business Experience: We seek to have directors with experience as executives, directors or in other leadership positions in areas relevant to the retail industry on a global scale. We value directors with a global business perspective and those with experience in our high priority areas, including consumer products, customer service, licensing, human resource management and merchandising (including e-commerce and other channels of commerce). |
• | Sales and Marketing Experience: Directors with experience in dealing with consumers, particularly in the areas of marketing, marketing-related technology, advertising or otherwise selling products or services to consumers, provide valuable insights to the Company. They understand consumer needs and are experienced in identifying and developing marketing campaigns that might resonate with consumers, the use of technology and emerging and non-traditional marketing media (such as social networking, viral marketing and e-commerce), and identifying potential changes in consumer trends and buying habits. |
• | Technology Experience: Directors with an understanding of technology as it relates to the retail industry and/or marketing help the Company focus its efforts in developing and investing in new technologies. |
• | Public Company Board Experience: Directors who have experience on other public company boards develop an understanding of corporate governance trends affecting public companies and the extensive and complex oversight responsibilities associated with the role of a public company director. They also bring to the Company an understanding of different business processes, challenges and strategies. |
Area of Experience | Bollenbach | Bryant | Connelly | Feldberg | Hale | Levinson | Lundgren |
Leadership Experience | |||||||
• CEO/President/senior executive of public company | x | x | x | x | x | x | |
• Dean of prestigious business school or other senior faculty position | x | ||||||
• Senior advisor to leading financial services firm | x | ||||||
• Senior government position or appointment | x | ||||||
• Senior-level executive position with nonprofit organization | x | ||||||
• Senior-level executive positions with companies that have grown their businesses through mergers and acquisitions | x | x | x | x | x | x | |
Finance Experience | |||||||
• Financially literate | x | x | x | x | x | x | x |
• Specific experience in investment or banking matters or as a current or former CFO | x | x | x | x | |||
• Has served as an audit committee financial expert | x | ||||||
Industry Knowledge and Global Business Experience | |||||||
• Senior executive or director of substantial business enterprise engaged in merchandising, licensing, consumer products and/or consumer and customer service | x | x | x | x | x | x | x |
• Experience in human resource management | x | x | x | ||||
Sales and Marketing Experience | |||||||
• Experience in sales and/or marketing, including use of social networking, e-commerce and other alternative channels | x | x | x | x | |||
Technology Experience | |||||||
• Understanding of technology as it relates to retail and/or marketing | x | x | |||||
Public Company Board Experience | |||||||
• Experience on boards other than Macy's | x | x | x | x | x |
Area of Experience | Neubauer | Roché | Varga | Weatherup | Whittington | Young-Scrivner | |
Leadership Experience | |||||||
• CEO/President/senior executive of public company | x | x | x | x | x | x | |
• Dean of prestigious business school or other senior faculty position | |||||||
• Senior advisor to leading financial services firm | x | ||||||
• Senior government position or appointment | |||||||
• Senior-level executive position with nonprofit organization | x | ||||||
• Senior-level executive positions with companies that have grown their businesses through mergers and acquisitions | x | x | x | x | |||
Finance Experience | |||||||
• Financially literate | x | x | x | x | x | x | |
• Specific experience in investment or banking matters or as a current or former CFO | x | x | x | ||||
• Has served as an audit committee financial expert | x | x | x | ||||
Industry Knowledge and Global Business Experience | |||||||
• Senior executive or director of substantial business enterprise engaged in merchandising, licensing, consumer products and/or consumer and customer service | x | x | x | x | x | x | |
• Experience in human resource management | x | ||||||
Sales and Marketing Experience | |||||||
• Experience in sales and/or marketing, including use of social networking, e-commerce and other alternative channels | x | x | x | x | x | ||
Technology Experience | |||||||
• Understanding of technology as it relates to retail and/or marketing | x | ||||||
Public Company Board Experience | |||||||
• Experience on boards other than Macy's | x | x | x | x | x |
• | that the notice by the shareholder set forth certain information concerning such shareholder and the shareholder's nominees, including their names and addresses; |
• | a representation that the shareholder is entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; |
• | the class and number of shares of Macy's stock owned or beneficially owned by such shareholder; |
• | a description of all arrangements or understandings between the shareholder and each nominee; |
• | such other information as would be required to be included in a proxy statement soliciting proxies for the election of the nominees of such shareholder; and |
• | the consent of each nominee to serve as a director of Macy's if so elected. |
Type of Compensation | Amount of Compensation | |
Board Retainer | $70,000 annually | |
Committee (non-chair) Member Retainer | $10,000 annually | |
Committee Chair Retainer | $20,000 annually | |
Equity Grant | annual award of restricted stock units with a value of $140,000 | |
Matching Philanthropic Gift | up to $15,000 annually |
Name | Years |
Feldberg | 5 |
Neubauer | 5 |
Weatherup | 1 |
Whittington | 4 |
Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Changes in Pension Value and Nonqualified Deferred Compensation Earnings(3) ($) | All Other Compensation(4) ($) | Total ($) | |||||||||
Stephen F. Bollenbach | 90,000 | 140,007 | 0 | 667 | 230,674 | |||||||||
Deirdre P. Connelly | 90,000 | 140,007 | 0 | 6,390 | 236,397 | |||||||||
Meyer Feldberg | 100,000 | 140,007 | 47,285 | 19,817 | 307,109 | |||||||||
Leslie D. Hale | 5,833 | 0 | 0 | 0 | 5,833 | |||||||||
Sara Levinson | 90,000 | 140,007 | 0 | 6,043 | 236,050 | |||||||||
Joseph Neubauer | 110,000 | 140,007 | 46,756 | 28,345 | 325,108 | |||||||||
Joyce M. Roché | 100,000 | 140,007 | 0 | 17,129 | 257,136 | |||||||||
Paul C. Varga | 90,000 | 140,007 | 0 | 4,948 | 234,955 | |||||||||
Craig E. Weatherup | 90,000 | 140,007 | 9,037 | 17,070 | 256,114 | |||||||||
Marna C. Whittington | 100,000 | 140,007 | 39,220 | 19,069 | 298,296 | |||||||||
Annie Young-Scrivner | 51,667 | 69,981 | 0 | 1,106 | 122,754 |
(1) | All cash compensation is reflected in the "Fees Earned or Paid in Cash" column, whether it is paid currently in cash or deferred under the Director Deferred Compensation Plan. |
(2) | The Non-Employee Directors other than Ms. Young-Scrivner and Mrs. Hale received 2,411 restricted stock units on May 16, 2014, valued at $58.07 per share, which was the closing price of our common stock on the grant date. With respect to non-employee directors elected after the annual meeting date, our practice has been to grant restricted stock units valued at 50% of the annual grant if the director is elected within six months after the annual meeting. Pursuant to that practice, Ms. Young-Scrivner received 1,193 restricted stock units on July 1, 2014, valued at $58.66 per share, which was the closing price of our common stock on the grant date. The following table shows the number of stock options, deferred stock unit credits and restricted stock units held by each of the Non-Employee Directors as of the end of fiscal 2014: |
Stock Options | |||||||||||
Name | Exercisable (#) | Unexercisable (#) | Deferred Stock Unit Credits (#) | Restricted Stock Units (#) | |||||||
Bollenbach | 25,000 | 0 | 46,102 | 2,411 | |||||||
Connelly | 20,000 | 0 | 16,072 | 2,411 | |||||||
Feldberg | 40,000 | 0 | 16,072 | 2,411 | |||||||
Hale | 0 | 0 | 0 | 0 | |||||||
Levinson | 0 | 0 | 43,437 | 2,411 | |||||||
Neubauer | 10,000 | 0 | 116,167 | 2,411 | |||||||
Roché | 40,000 | 0 | 43,309 | 2,411 | |||||||
Varga | 0 | 0 | 6,771 | 2,411 | |||||||
Weatherup | 30,000 | 0 | 79,812 | 2,411 | |||||||
Whittington | 30,000 | 0 | 46,477 | 2,411 | |||||||
Young-Scrivner | 0 | 0 | 51 | 1,193 |
(3) | The present value of benefits under the retirement plan for Non-Employee Directors for each individual was determined as a deferred temporary life annuity based on years of Board service prior to May 16, 1997. The present value basis includes a discount rate of 3.55% and generational mortality rates under the RP-2014 White Collar Table projected using scale MP-2014. Scale MP-2014 defines how future mortality improvements are incorporated into the projected mortality table and is based on a blend of Social Security experience and the long-term assumption for mortality improvement rates by the Society of Actuaries' Retirement Plans Experience Committee. The increase in the actuarial present value of the pension benefit is mainly attributable to the fact that the annual retainer increased from $65,000 to $70,000 for fiscal 2014 and the changes in the discount rate and mortality assumption. The calculations assume that the annual retainer remains at $70,000 (the retainer at the end of fiscal 2014) and a retirement at age 74, the mandatory retirement age for Directors as of the end of fiscal 2014. |
(4) | "All Other Compensation" consists of the items shown below. Merchandise discounts are credited to the Directors' Macy's charge accounts. |
Name | Merchandise Discount ($) | Matching Philanthropic Gift ($) | Total ($) | ||||||
Bollenbach | 667 | 0 | 667 | ||||||
Connelly | 1,390 | 5,000 | 6,390 | ||||||
Feldberg | 4,817 | 15,000 | 19,817 | ||||||
Hale | 0 | 0 | 0 | ||||||
Levinson | 2,383 | 3,660 | 6,043 | ||||||
Neubauer | 13,345 | 15,000 | 28,345 | ||||||
Roché | 2,129 | 15,000 | 17,129 | ||||||
Varga | 4,948 | 0 | 4,948 | ||||||
Weatherup | 2,070 | 15,000 | 17,070 | ||||||
Whittington | 4,069 | 15,000 | 19,069 | ||||||
Young-Scrivner | 1,106 | 0 | 1,106 |
• | any shares beneficially owned by the director or members of the director's immediate family; |
• | restricted stock or restricted stock units before the restrictions have lapsed; and |
• | stock credits or other stock units credited to a director's account. |
Year | Audit Fees ($) | Audit- Related Fees ($) | Tax Fees ($) | All Other Fees ($) | Total ($) | ||||||||||
2014 | 4,700,000 | 1,229,300 | 7,735 | 334,496 | 6,271,531 | ||||||||||
2013 | 5,345,000 | 1,209,300 | 75,000 | 90,950 | 6,720,250 |
• | aligns executive compensation with shareholder value on an annual and long-term basis through a combination of base pay, annual incentive and long-term incentives; |
• | includes a mix of direct compensation elements that emphasizes performance results, with 87% of the targeted compensation for the Chief Executive Officer and approximately 71% on average of the targeted compensation for the other Named Executives being tied to changes in shareholder value and how well the Company performs against its business plans and objectives; |
• | delivers annual incentive payouts to executives only when they achieve targeted levels of financial results with respect to three key performance metrics included in our annual business plan - sales, earnings before interest and taxes (EBIT) and cash flow; |
• | encourages long-term decision-making by aligning the interests of executives with those of shareholders through equity incentives that are subject to multi-year vesting and/or performance requirements that include financial, operational and strategic objectives as well as changes in absolute and relative shareholder value over time; and |
• | includes features that mitigate risks to the Company, including limits on incentive awards, use of multiple performance measures in our incentive plans, substantial stock ownership guidelines, compensation clawback provisions, anti-hedging/pledging policies, independent CMD Committee oversight and engagement of an independent consultant that does no other work for the Company or management. |
• | Terry J. Lundgren, Chairman and Chief Executive Officer. Mr. Lundgren has been with Macy's for more than 33 years, and has served as our Chief Executive Officer for the last 12 years, making him one of the longest-tenured CEOs in the department stores industry. |
• | Karen M. Hoguet, Chief Financial Officer. Mrs. Hoguet has been with Macy's for more than 32 years, and has been our Chief Financial Officer for 17 years. |
• | Jeffrey Gennette, President. Mr. Gennette has been with Macy's for more than 31 years. He has been in his current position since March 2014. From February 2009 through February 2014, Mr. Gennette was our Chief Merchandising Officer. |
• | Timothy M. Adams, Chief Private Brand Officer. Mr. Adams has been with Macy's for more than 32 years. He served as Chief Private Brand Officer from February 2009 through the end of fiscal 2014. |
• | Peter R. Sachse, Chief Stores Officer. Mr. Sachse has been with Macy's for more than 31 years. He served as Chief Stores Officer from February 2012 through the end of fiscal 2014. Prior to February 2012, he was our Chief Marketing Officer and Chairman of macys.com. |
• | The senior-most executives, including the Named Executives, are held most accountable to shareholders by varying the portion of variable, performance-based pay directly with each executive's level of responsibility: |
• | 87% of Mr. Lundgren's targeted total direct compensation for fiscal 2014 was delivered through variable incentives in which payout is tied to changes in stock price and pre-determined performance objectives. |
• | On average, approximately 71% of the targeted total direct compensation for fiscal 2014 of the other Named Executives was delivered through variable incentives in which payout is tied to changes in stock price and pre-determined performance objectives. |
• | We emphasize equity-based long-term incentives to ensure that these executives are focused on longer-term operating and stock price performance in addition to shorter-term goals. The targeted value for long-term |
• | The value received from our variable, performance-based pay, if any, is directly related to our performance and reflects a combination of internal financial measures of success, such as operating income (which represents earnings before interest and taxes, or EBIT), sales, cash flow, return on invested capital (ROIC) and external measurements of success, such as stock price performance on an absolute and relative-to-peers basis. |
• | To ensure that costs are affordable and reasonable in relation to our operating results, no payments are made under the annual incentive plan unless we have positive EBIT and achieve a net profit for the fiscal year, even if other performance objectives are met. |
• | Equity-based long-term incentive awards are subject to multi-year vesting and/or performance requirements to link compensation to performance measured by achievement of financial, operational and strategic objectives as well as changes in absolute and relative shareholder value over time. |
• | To further reinforce the long-term alignment of executive interests with shareholders, we maintain policies that require executives to accumulate and hold substantial amounts of Macy's common stock and we prohibit executives from hedging the risk of such ownership or pledging such shares as collateral. We also maintain a clawback policy that enables the recapture of previously paid incentive compensation in certain circumstances involving a financial restatement. |
• | Comparable sales on an owned basis in fiscal 2014 were up 0.7%, our fifth consecutive year of comparable sales growth. |
• | Comparable sales on an owned plus licensed basis for fiscal 2014 were up 1.4% compared to fiscal 2013. |
2010 | 2011 | 2012 | 2013 | 2014 | ||||||||
Comparable Sales Growth: | ||||||||||||
On an owned basis | 4.6% | 5.3% | 3.7% | 1.9% | 0.7% | |||||||
On an owned plus licensed basis | 4.4% | 5.7% | 4.0% | 2.8% | 1.4% |
Other Fiscal 2014 Highlights | |
| Our 1-Year, 3-Year and 5-Year Cumulative TSR was 22.4%, 100.5% and 334.3%, respectively. |
| Our TSR over the last 5 years is above the 84th percentile compared to our peer group over the same 5-year period. |
| The price of our Common Stock increased by 20% over the fiscal 2013 year-end price. |
| We returned $2.3 billion to shareholders through dividends and share repurchases during fiscal 2014. |
| We increased our cash dividend by 25% in fiscal 2014. |
• | provided base salary increases ranging from 1.8% to 2.9% to the Named Executives other than Mr. Lundgren and Mr. Gennette; |
• | increased Mr. Lundgren's targeted long-term incentive award opportunity by 6% to maintain his targeted total direct compensation relative to our executive compensation peer group and further ensure that increases in his compensation are directly linked to Company longer-term operating and stock price performance. Mr. Lundgren’s salary and target annual incentive award opportunity were not increased during fiscal 2014; |
• | in connection with his promotion to President and associated expansion of his responsibilities, increased Mr. Gennette's base salary by 8.6%, increased his targeted annual incentive award opportunity from 75% to 100% of base salary, with corresponding changes to his threshold and maximum annual incentive award opportunities, and increased the targeted value of his long-term incentive awards; |
• | made annual incentive award payments with respect to fiscal 2014 performance at approximately 94% of the target performance level to the Named Executives based solely on achievement against pre-determined EBIT, Sales and Cash Flow goals; |
• | granted performance-based restricted stock units and stock options to the Named Executives, with a mix of 60% performance-based restricted stock units and 40% stock options: |
• | performance-based restricted stock units will be earned based on performance relative to average EBITDA margin, average ROIC and relative TSR goals and measured over a three-year (fiscal 2014-2016) performance period, subject to attainment of a three-year cumulative EBITDA threshold (if the cumulative EBITDA threshold is not met, the entire award is forfeited regardless of performance against the other metrics); |
• | stock options will vest over a four-year period and may be exercisable for up to 10 years following the grant date; and |
• | determined that the Named Executives had earned 98.59% of the targeted number of performance-based restricted stock units granted in fiscal 2012, based on meeting the cumulative EBITDA threshold of $8.0 billion and the level of achievement against average EBITDA margin, average ROIC and relative TSR goals over the three-year (fiscal 2012-2014) performance period. |
WHAT WE DO AND DON'T DO | |||
We align executive compensation with the interests of our shareholders | ü | Focus on performance-based compensation (page 47) | |
ü | Pay well-aligned with performance (pages 38-41) | ||
ü | Annual risk assessment of executive compensation program (page 23) | ||
ü | Robust stock ownership guidelines for executive officers and directors (pages 34 and 55) | ||
Our executive compensation program is designed to avoid excessive risk taking | ü | Use multiple performance objectives for both annual and long-term incentive plans (pages 50 and 52) | |
ü | Measure performance against both annual and multi-year standards (pages 49 and 51) | ||
ü | Set performance goals at levels high enough to encourage strong performance, but within reasonably attainable parameters to discourage excessive risk taking (pages 49 and 52) | ||
ü | Cap on performance-based compensation (pages 49 and 52) |
We adhere to executive compensation best practices | ü | Provide modest perquisites with reasonable business rationale (pages 53-54) |
ü | Annual say-on-pay vote (page 36) | |
ü | CMD Committee comprised of independent directors(page 25) | |
ü | Include a relative-to-peer TSR metric for performance-based restricted stock units (page 53) | |
ü | Provide for recoupment of incentive compensation in certain circumstances (page 55) | |
ü | Prohibit hedging and pledging transactions by executive officers and directors (page 56) | |
ü | Utilize an independent compensation consultant that is independent of management (page 43) | |
ü | Provide a reasonable post-employment change-in-control plan (page 54) | |
X | Provide excise tax gross ups upon a change in control | |
X | Individual employment contracts (page 67) | |
X | Reprice or exchange underwater stock options (page 60) | |
X | Individual change-in-control agreements (page 68) |
• | Providing competitive and reasonable compensation opportunities; |
• | Focusing on results and strategic objectives; |
• | Fostering a pay-for-performance culture; |
• | Attracting and retaining key executives; and |
• | Balancing risk and reward and ensuring accountability to shareholders. |
Element | Description | Purpose |
Base Salary | Fixed compensation component. Reviewed annually and adjusted if and when appropriate. | Market-driven base-line compensation is targeted at a level necessary to attract and retain high-quality talent and ensure a sustainable level of fixed costs; amount recognizes differences in positions and/or responsibilities as well as experience and individual performance over the long term. Generally, executives who are new in their roles are positioned lower in the competitive range, while those with more experience are positioned higher in the range to reflect their greater skill set relative to the external benchmark and sustained high performance over time. |
Annual Incentive Awards | Variable compensation component. Performance-based cash award opportunity. Amounts actually earned will vary based on our performance. | Aligns compensation with business strategy and operating performance by rewarding achievement of short-term (annual) financial targets. |
Long-Term Incentive Awards | Variable compensation component, generally granted annually as a combination of performance-based restricted stock units and stock options. Amounts actually earned will vary based on stock price appreciation and, in the case of performance-based restricted stock units, our financial performance and absolute and relative TSR. | Opportunities for ownership and financial reward in support of our longer-term financial goals and stock price growth; also supports retention and, consequently, succession planning. Provides a link between compensation and long-term shareholder interests as reflected in changes in stock price. |
• | our compensation philosophy, |
• | our financial and operating performance, |
• | compensation policies and practices for our employees generally, and |
• | practices and executive compensation levels within peer companies. |
• | the design of our annual bonus and long-term incentive plans, including the degree to which the incentive plans support our business strategy and balance risk-taking with potential reward; |
• | the setting of performance objectives; |
• | peer group pay and performance comparisons; |
• | the competitiveness of compensation provided to our key executives; |
• | changes to the Named Executives' compensation levels; |
• | the design of other forms of key executive compensation and benefits programs; and |
• | the preparation of public filings related to executive compensation, including this CD&A and the accompanying tables and footnotes. |
• | We have grown from being a $15 billion regional department store company to a national omnichannel retailer with more than $28 billion in sales. |
• | We have successfully integrated the acquisition of the May Company, which doubled the number of stores operated by the Company. This included the conversion of all the regional store nameplates to Macy's, and the development of a highly successful strategy of omnichannel marketing through the integration of stores, online and mobile resources. |
• | We reached a milestone in fiscal 2014 by achieving the 14% Adjusted EBITDA margin rate level we set as a long-range objective following the May Company acquisition. |
• | We have become a customer-centric organization that embraces localization, a seamless omnichannel blend of stores, online and mobile, and more meaningful customer engagement on the selling floor and all other customer interactions. |
• | Our total employment has grown from approximately 110,000 associates to approximately 175,000 associates - creating meaningful career development opportunities and strengthening Macy's reputation as the talent leader in retailing. |
• | Adjusted EBITDA has increased more than 47% and 270 basis points as a percent of sales from fiscal 2009 to 2014. |
($ in millions) | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
Adjusted EBITDA | $2,664 | $3,069 | $3,471 | $3,715 | $3,786 | $3,923 |
Adjusted EBITDA as a percent to net sales | 11.3% | 12.3% | 13.1% | 13.4% | 13.6% | 14.0% |
• | Adjusted Diluted EPS has increased approximately 224% from fiscal 2009 to 2014. |
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | |
Adjusted Diluted EPS | $1.36 | $2.11 | $2.88 | $3.46 | $4.00 | $4.40 |
• | Comparable sales on an owned basis have grown for five consecutive years. In addition, comparable sales on an owned plus licensed basis have grown by approximately 3.7% annually. |
2010 | 2011 | 2012 | 2013 | 2014 | ||
Comparable Sales Growth: | ||||||
On an owned basis | 4.6% | 5.3% | 3.7% | 1.9% | 0.7% | |
On an owned plus licensed basis | 4.4% | 5.7% | 4.0% | 2.8% | 1.4% |
• | Our stock price has reacted favorably during this time period on both an absolute and relative-to-peers basis, with total shareholder return over the last five years of 334.3%, which is above the 84th percentile versus our 12-company peer group over the same five-year period. |
Bed, Bath & Beyond | Kohl's | Sears Holdings |
Dillard's | L Brands | Target |
Gap | Nordstrom | TJX Companies |
J.C. Penney | Ross Stores | Walmart Stores |
($ in millions) | Revenue (1) | Net Income (1)(2) | Market Cap (3) | Total Assets (4) | Number of Employees (5) | ||||||||||||||
75th Percentile: | $29,839 | $1,306 | $24,617 | $14,685 | 199,750 | ||||||||||||||
Median: | 14,612 | 900 | 14,577 | 9,914 | 127,000 | ||||||||||||||
25th Percentile: | 11,516 | 625 | 10,545 | 6,993 | 65,350 | ||||||||||||||
Macy's | $28,024 | $1,504 | $20,567 | $20,619 | 172,500 | ||||||||||||||
Macy's Percentile Rank | 73% | 81% | 73% | 83% | 70% |
(i) | an analysis of the design of our annual incentive and long-term incentive programs in relation to our financial and strategic priorities, human resources objectives and market practice to determine whether changes were appropriate, |
(ii) | a competitive analysis of the targeted total direct compensation for the Named Executives, including base salary, annual incentives and long-term incentives, and |
(iii) | a competitive assessment of our long-term incentive grant practices, including a review of share usage (shares granted in equity plans as a percentage of weighted-average outstanding shares) and potential dilution relative to peer group practice and a fair value transfer analysis that measured the aggregate cost of long-term incentives as a percent of market capitalization and revenue. |
• | The CMD Committee approved base salary increases in the range of 1.8% to 2.9% for the Named Executives other than Mr. Lundgren and Mr. Gennette. These salary changes were intended to maintain pace with market standards and recognize increased responsibilities or high performance. See the "Base Salary" discussion later in this CD&A. There were no changes to target annual incentive award or long-term incentive opportunities for fiscal 2014 for these Named Executives. |
• | The Board increased Mr. Lundgren's targeted long-term incentive award opportunity by 6% (from $7.75 million to $8.215 million) to maintain his targeted total direct compensation in the median to 75th percentile range of the executive compensation peer group and further ensure that increases in his compensation are directly linked to Company longer-term operating and stock price performance. No changes were made to Mr. Lundgren's base salary or annual incentive award opportunity for fiscal 2014 and, as a result, his targeted total direct compensation opportunity increased by approximately 4% for fiscal 2014. |
• | In connection with his March 2014 promotion to President and associated expansion of responsibilities, the CMD Committee increased Mr. Gennette's base salary from $875,000 to $950,000, increased his target annual incentive award opportunity from 75% to 100% of base salary (with corresponding changes to his threshold and maximum award opportunities) and increased his targeted long-term incentive award opportunity from $1.325 million to $1.8 million. |
• | 87% of Mr. Lundgren's targeted total direct compensation (salary, annual incentive and grant date value of long-term incentive awards) for fiscal 2014 was delivered through variable incentives in which payout is tied to changes in stock price and predetermined performance objectives; and |
• | On average, approximately 71% of targeted total direct compensation for fiscal 2014 for the other Named Executives was delivered through variable incentives in which payout is tied to changes in stock price and predetermined performance objectives. |
CEO Targeted Pay Mix | Salary | Annual Incentive | Performance Restricted Stock Units | Stock Options | Total |
% of Total Compensation | 13% | 22% | 39% | 26% |